I try to pull out my crystal ball and give you some insight on some of my predictions. First let’s take a look at this week’s rates. New York as a whole mortgage rates average sits at about 5.87% for fixed-rate 30 year mortgages. This is up slightly from last week’s low of around 5 3/4 percent. With inflationary pressures on the horizon due to the rising gas prices and prices on commodities which driving up the cost of basic necessities, I expect these pressures will continue to move mortgage rates higher. However, any increases should be negligible as other economic indicators struggle. Still I believe it’s a bit odd that rates took a drive as much as they did during the beginning of March. Then again, this is strange times. However, I believe here on Staten Island, we’ve reached a price and interest-rate equilibrium.

What do I mean by home price/interest-rate equilibrium, well basically if there’s any move on and prices downward, they’ll be counteracted by an increase in interest rates . Consequently for buyers, I am not so sure that prices will drop to the point that makes a significant difference on their monthly mortgage payment. At least that’s my feeling here. In New York City where basic fundamentals are still strong for home-ownership. I think many times people get caught up in national headlines about the real estate market and try to apply them into what they feel locally is happening with housing. I believe, one of things most overlooked by many looking into buying a home is the specific cause and effect relationship between economics and demographics of an area, and their impact on the local housing market. I believe the Staten Island real estate market, while showing attrition is still fundamentally stronger than many places across the country. I don’t paint a rosy picture either, because that is not the case. There are glaring issues, especially in price of new construction and the amount of time new construction is sitting on the market. All I’m saying is that our real estate market resilience is stronger based on fundamentals that many cities do not share with us across the country. The fundamental variable is that the weaker US dollar is driving many Europeans into the New York real estate market as a whole. Additionally, Europeans tourism has provided additional economic to the New York economy.

Back to the interest-rates and my prediction for the spring leading into the summer. I think interest rates overall will remain static, with peaks and valleys coming to about 6 1/4 percent by July. I still believe inflationary pressures will have a continued impact in the increase of interest rates. However, there are several countering factors that are working against raising interest rates. I believe at the end of the day how these factors are weighted will determine where the interest- rates will actually go. However, my final prediction is 6.25 by July 1.